capacity building for ghg emissions reduction through energy efficiency in romania undp/gef's...

Capacity Building for GHG Emissions Reduction through Energy Efficiency in Romania

UNDP/GEF's

Energy Efficiency Financing TeamConverting energy efficiency ideas into real

investment projects throughout Romania

“Implementation of the European Environmental Directives: Problems and Solutions”

September 29th 2004

Mark Velody

Project Manager

Tel. 021 231 2008

[email protected]

UNOPS Project Office

Str. Washington nr.45

Bucuresti, Romania

www.energie.undp.ro


I will introduce three themes today…



1. Why a capacity building project for Energy Efficiency Financing?



1. Why a capacity building project for Energy Efficiency 1. Why a capacity building project for Energy Efficiency Financing?Financing?

2. UNDP/GEF’s Energy Efficiency Financing Team – who we are and what we do




2. UNDP/GEF’s Energy Efficiency Financing 2. UNDP/GEF’s Energy Efficiency Financing Team – who we are and what we doTeam – who we are and what we do

3. How you can do something for the environment!


So let’s begin…

1. Why a capacity building project for Energy Efficiency Financing?


There are environmental, economic and social reasons to improve energy efficiency Environmental

- the Energy Sector is the largest contributor to

greenhouse gases and global warming Economic

- energy intensity inhibits economic development Social

- less waste, warmer people etc


So… a UNDP/GEF project has been set up to leverage financing for energy efficiency projects Objectives are strictly environmental...

- GHG reduction …but activities strictly commercial

- identify potentially ‘bankable’ EE/renewable projects

- help persuade a bank/financer to fund the project

- carry out studies to support the loan/investment


Why Energy Efficiency above renewables? Romania has created a strong economic incentive

to invest in energy efficiency

- energy prices are higher, so Romanians are now

open to the idea of investing to lower bills Romania has not (yet) created a strong economic

incentive to invest in renewable energy

- it difficult to get renewable investments to ‘fly’

- so there are few ‘bankable’ proposals at present


Why is there a need to focus on Financing? Banks

– do not recognise EE as an investment opportunity Third party financiers

– few ‘ESCOs’, little local experience of this model Private sector investors

– want to lower energy bills – but do not know how Public sector investors

– shy away from commercial financing




2. UNDP/GEF’s Energy Efficiency Financing Team – who we are and what we do


Project partners are ARCE, UNDP and GEF Romanian Agency for Energy Conservation (ARCE)

- Who represent the Government of Romania United Nations Development Programme (UNDP)

- Who are carrying out the project through the United

Nations Office for Project Services (UNOPS) Global Environment Facility (GEF)

- Who have provided $2 million in co-financing


Our strategy is to lower GHG emissions by: Turning energy efficiency ideas into financed

projects

- Using small amounts of grant financing…

- …to leverage large amounts of commercial financing Pass on expertise in how to do this as widely as

possible

- To our beneficiaries, partners, consultants, staff and

other stakeholders


Our beneficiaries (so far) include both public and private sector investors Municipalities: Alba Iulia, Campulung Moldovenesc, Cluj-Napoca, Gheorghieni, Iasi, Miercurea Ciuc, Orastie, Radauti, Satu Mare, Sighisoara, Suceava, Vaslui, Vatra Dornei,Victoria, Targu Jiu, Tarnaveni and Topoloveni. Companies: Ambro, Ardealu Carei, Electroaparataj, Goscom Miercurea Ciuc, Infotim Timisoara, Iridex, Isovolta, Ulerom, Vrancart


… and we work with a wide range of other stakeholders ARCE – and its branches throughout Romania Consultants, who include (so far) ASA

Holding, EnergoBit, Forenerg, ICPT Instalati, SC

Proiect, Trapec, Wayda si Wayda The financial community – banks, special funds

such as FREE and RIIEC, the loan guarantee

community, suppliers who offer supplier credit.


… to support many different types of energy efficiency investment projects Building rehabilitation Schools

Hospitals Heating and cooling

District heating CHP

Lighting


This is what we do… Identify possible energy efficiency investments Assess if three key success factors are present:

- Technically realistic proposals (or ideas)

- by solvent/creditworthy project developers

- with determination (will) to carry out the project Help to identify commercial financing sources Enter into a tri-partite Agreement-in-Principle Prepare studies to support the investment


The ‘Agreement-in-Principle’ is a key step... If -

UNDP/GEF funds a Feasibility Study

(and if the results of the study are positive)

Then -

Financier will make investment funds available;

Project Developer will carry out the EE project


Based on Agreements-in-Principle, we can provide two basic services Technical Assistance* - our main service

- Typically, grant-funded feasibility studies Direct Contributions** – selected projects only

- Grants of up to 20% of an investment…

- If financing is in place for the other 80%* Technical Assistance is available for both Private Sector and Public Sector applicants** Direct Contributions may be awarded to for Public Sector projects only, up to a limit of $50,000 per project. Funds are awarded only to the best projects – as defined by an evaluation committee using criteria published at www.energie.undp.ro.

http://www.energie.undp.ro/


We can also advise on sources of commercial financing… Bank loans

Special funds and equity funds

Guarantees and other financial instruments

Suppliers credit

Third-party financing/ESCO facilities

(We have a full-time banker on our team)


… including financing from our ‘sister’ GEF project – the ‘FREE’

Romanian Energy Efficiency Fund

(our ‘sister’ project)

UNDP/GEF

(‘our project’)


Work is carried out by a core team Mark Velody – Project Manager Laura Radulescu – Outreach Manager Bogdan Angheluta – Energy Efficiency Manager Stefania Racolta – Head of Banking Relations Ciprian Ghetau – Project Finance Manager Roxana Schiopu – Office Manager Emilian Popescu – Driver/Administrator

… supported by lots of consultants


And we are proving that the model works!No. of applications/ideas evaluated – 172

No. of Agreements-in-Principle signed – 30

No. of external studies launched – 16

No. of studies by in-house team – 4

The first few projects are now implementation, and studies under-way so far are should lead to energy efficiency investments of at least $4 – 7 million




2. UNDP/GEF’s Energy Efficiency Financing 2. UNDP/GEF’s Energy Efficiency Financing Team – who we are and what we doTeam – who we are and what we do

3. How you can do something for the environment!


How YOU can make a real and rapid contribution to the environment Identify potential UNDP/GEF beneficiaries

- energy consumers who think their bills are too high

- from the private sector or the public sector Tell them about UNDP/GEF

- and suggest that they contact us for assistance

We will do all we can to turn their ideas into real energy efficiency projects!


Recap – what we do… Identify possible energy efficiency investments Assess if three key success factors are present:



- with determination (will) to carry out the project Help to identify commercial financing sources Enter into a tri-partite Agreement-in-Principle Prepare studies to support the investment


So we are looking for… IdentifyIdentify possible energy efficiency investmentspossible energy efficiency investments Assess if three key success factors are presentAssess if three key success factors are present:


- by solvent/creditworthy project developers- by solvent/creditworthy project developers

- with determination (will) to carry out the project- with determination (will) to carry out the project Help to identify commercial financing sourcesHelp to identify commercial financing sources Enter into a tri-partite Enter into a tri-partite Agreement-in-PrincipleAgreement-in-Principle Prepare studies to support the investmentPrepare studies to support the investment





- with determination (will) to carry out the project- with determination (will) to carry out the project Help to identify commercial financing sourcesHelp to identify commercial financing sources Enter into a tri-partite Enter into a tri-partite Agreement-in-PrincipleAgreement-in-Principle Prepare studies to support the investmentPrepare studies to support the investment





- with determination (will) to carry out the project Help to identify commercial financing sourcesHelp to identify commercial financing sources Enter into a tri-partite Enter into a tri-partite Agreement-in-PrincipleAgreement-in-Principle Prepare studies to support the investmentPrepare studies to support the investment


So… please direct potential beneficiaries to:

www.energie.undp.ro

Or phone 231 2008, or talk to me today


Mark Velody

Project Manager

Tel. 021 231 2008

[email protected]

UNOPS Project Office

Str. Washington nr.45

Bucuresti, Romania

www.energie.undp.ro

UNDP/GEF's

Energy Efficiency Financing TeamConverting energy efficiency ideas into real

investment projects throughout Romania

“Implementation of the European Environmental Directives: Problems and Solutions”

September 29th 2004

capacity building for ghg emissions reduction through energy efficiency in romania undp/gef's...

Documents

energy efficiency ideas

romania slide

energy sector

renewable energy

energy bills

ghg reduction

ghg emissions reduction

economic energy intensity